Chapter 5 Flashcards
Cash and other assets which are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business for one year whichever is longer.
Current assets
Cash, short term investments, receivables, inventory, prepaid expenses
Current assets
Property used to earn rental income or capital appreciation or both.
Investment property
Generally securities issued by other companies that are expected to be held for more than one year.
Investments and funds
Tangible, long-lived assets. For example land, buildings, machinery, furniture, fixtures, related to accumulated depreciation, natural resources, and related accumulation.
Property, plant, and equipment
Assets lacking physical substance, such as patents or trademarks.
Intangible assets
Short-term obligations, such as accounts payable, wages payable, unearned revenues, or accrued liabilities, that are expected to be settled in the near future, typically one year or less.
Current liabilities
Long-term debt, long-term accruals, deferred income tax liabilities, notes payable, bonds payable, discontinued operations liabilities.
Long-term liabilities
Contributed capital, retained earnings, accumulated other comprehensive income, treasury stock, noncontrolling interest.
Owners equity
The amount owed to stockholders for company profits that were reinvested in the business instead of distributed as dividends
Retained earnings
Future value and is owned or controlled by the firm
Asset
Obligation to provide goods or services resulting from past events
Liability
Current assets/current liabilities
Current ratio
Total liabilities/ total assets
Debt ratio
The ability to purchase or sell an asset quickly and easily at a price close to fair market value. The ability to make short-term obligations using assets that are the most readily converted into cash
Liquidity
Obligations that broadly represent a probable sacrifice of economic benefits in periods generally greater than one year in the future
Non-current liabilities
The difference between current assets and currently liabilities
Working capital
A balance sheet organized so as to group together the various assets and liabilities into subcategories
Classified balance sheet
The historical cost of an asset, adjusted for amortization and impairment
Amoritised cost
Amounts owed by business to creditors as a result of borrowing that are evidenced by loan agreements
Notes payable
A financial instrument is a value that depends on the value of some underlying asset or factor
Derivatives
With respect to financial statement analysis, the ability of a company to fulfill its long term obligations.
Solvency
The mix of debt and equity that a company uses to finance a business; a company specific mixture of long-term financing
Capital structure
A balance sheet liability that arises when a deficit amount is paid for income taxes relative to accounting profit
Deferred tax liabilities
The balance sheet asset that arises when an excess amount is paid for income taxes relative to accounting profit
Deferred tax asset
A liability account for money that has been collected for goods or services that have not yet been delivered; payment received an advance of providing a good or service
Deferred income
